Tourism Holdings Rentals Limited: Sell-off is overdone, creates a great buying opportunity

About the author:

Author name:

By Belinda Moore

Job title:

Senior Analyst

Date posted:

10 May 2023, 8:00 AM

Sectors Covered:

Agriculture, Food & Beverage, Travel and Chemicals

• Tourism Holdings Rentals Limited's (ASX:THL) Investor Day showcased its strong market position, leverage to a tourism recovery, the material synergy benefits from merging with Apollo (ATL) and management's strong financial discipline (focused on increasing ROFE).
• While we were hoping for upgraded synergy targets and possibly upgraded FY23 guidance, these didn’t eventuate. Although FY23 NPAT may now be marginally impacted by a timing issue (but boosts FY24), we were always focused on the full recovery year and achievement of synergies or FY25.
• We think the stock has been oversold. THL is now trading on a recovery year (FY25) PE of only 8.7x, which is attractively priced for a global, market leader. Add.

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